"General enthusiasm for the strength of the economy, combined with the added tailwinds of recent tax law changes, continue to propel the housing market forward."

In October, Lennar agreed to buy smaller rival CalAtlantic Group Inc for $5.7 billion in a deal that will make it the largest homebuilder in the United States and give it more tools to deal with higher labor and land costs.

The move reflected the pressure on builders due to a shortage of skilled labor that is constraining the supply of homes and pushing costs up even as U. S. house prices rise for a seventh straight year.

Lennar's total revenue rose 12.1 percent to $3.79 billion, beating the average analyst estimate of $3.57 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to Lennar fell 1.2 percent to $309.6 million, or $1.29 per share, missing the average estimate of $1.48 per share.

A loss of about $12 million in Lennar's Rialto business, which manages commercial real estate and financing, also dented profits during the quarter. Some analysts had expected a gain of about $5 million at the business that accounts for about 2 percent of the total revenue.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty)

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